SmartCompany readers believe data analytics, artificial intelligence (AI), automation and the Internet of Things are set to be the biggest disruptors of business in the next decade — although autonomous vehicles aren’t even close to registering as a disruption yet.
But SMEs will need to do more in order to harness the power of analytics and use it to drive profit-driven decision making, one expert warns.
These findings come as part of SmartCompany‘s annual SME Directions Survey, sponsored by Netsuite Oracle, which questioned more than 700 small business respondents to gauge their views on the future of their businesses and the state of the market in the year ahead. The businesses surveyed come from all states and territories and a wide range of industries.
The findings show SMEs are clearly cognisant of the disrupting forces coming in the next decade, even though many are not immediately threatened.
As a result, SmartCompany readers are mobilising. Nearly 60% of respondents say they will be implementing new technology in the year ahead — and while upgrading hardware and software is the most popular course of action, businesses say their second-highest priority will be business intelligence.
This move is timely. The installation of digital infrastructure to measure business activity has immense value; analysis from Bain & Co found large businesses that use analytics are twice as likely to be in the top quartile of financial performance.
Another piece of research from the University of Ulster and the University of Kent found businesses with access to data from loyalty programs were more likely to turn that data into actionable insights. Additionally, smaller businesses with access to data were more able to include more employees in the decision making process, strengthening the possibility of making wise decisions.
However, many Australian businesses aren’t ready. One study from PricewaterhouseCoopers found that only 61% of businesses said their process is “somewhat guided” by data.
Another Infosys study found 23% of Australian business leaders don’t believe they have the skills to take advantage of AI.
Yet this comes at a time when access to data analysis and visualisation tools are easier than ever. IBM’s Watson program and tools such as Tableau are available at low cost, allowing even smaller businesses to access the power of information analysis.
Dr Theo Gazos is the managing director of Predictive Analytics Group, which sells analytics software and platforms to clients including the federal government. Gazos says in order for businesses to access the benefits of machine learning and data, they need to start now.
“Seek it out and try to understand it. You need to do that now to be ahead of the curve,” he says.
“The issue will come down to which industries and sectors are more vulnerable to distortion — those that have a lot of data, and are human resources intensive.”
Gazos says the legal industry has already seen the beginnings of this move, with businesses starting to use AI tools to trawl through paperwork and research.
“The application of these technologies are in their infancy. But they will become more efficient … so you need to understand it. Get what you can out of your data and your current information,” he says.
Gazos says many businesses need to think of artificial intelligence and data as tools, not adversaries. In fact, he says, when working with business teams who are hesitant that AI can replace their own jobs, data and machine learning enables them to create new roles and focus on more important tasks.
“If you embrace it, you’ll find that’s it not just about replacing people. You’re creating new opportunities,” he says.
Read the full survey findings in SmartCompany‘s ebook, The SME of the future.